Copenhagen-based Mikkeller is shutting down its brewery in the Miramar neighborhood of San Diego, effective immediately, and will begin contract brewing its offerings with San Diego’s AleSmith Brewing Co., the company announced today. The Miramar taproom will remain open through the end of September.
Mikkeller cited “two years of COVID and the difficult rising cost environment on the international brewing business” for the decision to shutter the 30,000-hectoliter (about 25,000-barrel) brewery. All brewery assets will be sold, with the option for a turnkey acquisition.
“This has been a very hard decision for us to make and comes with a lot of heartache for the
Mikkeller employees affected by the closing,” Mikkeller founder Mikkel Bjergsø said in a press release. “The hardships facing the craft beer industry and the economy at large are known to anyone; supply chain issues, rising costs, and unstable market conditions post-pandemic just to name a few. Unfortunately, this means that it is just not sustainable anymore to keep operating our San Diego brewery.
Mikkeller did not share how many employees would be impacted by the closing. The facility produced 10,418 barrels of beer in 2021, a relatively flat year after a -10% year-over-year production decline in 2020, according to estimates by the Brewers Association.
Mikkeller opened its first U.S. brick-and-mortar in San Diego in 2016, taking over AleSmith’s former headquarters. Prior to taking over the location, Mikkeller had contracted production of all its offerings. The majority of the brewery’s beer sold globally (90%) is contract brewed, mainly at De Proef Brouwerij in Belgium, according to the release. In addition to contract production, Mikkeller will only brew its own offerings at its three breweries in Copenhagen and London.
Mikkeller’s physical presence in the U.S. will continue with its retail locations in San Francisco and the Little Italy neighborhood of San Diego. Its East Coast location – a brewery and taproom at Citi Field in New York – was closed in October 2020, after two and a half years.
Despite the shift to contract brewing, Mikeller said it “remains committed to its product innovation in the U.S. craft beer market,” and it will continue “to service American distribution partners dependably and efficiently. Later this year, the company will launch a “U.S.-brewed version”of its non-alcoholic beer offerings, Drink’in the Sun and Weird Weather.
“The one thing that makes the craft beer community different from so many other industries is the willingness to collaborate, help each other in hard times, and grow together,” Bergsø said. “We built this company on that kind of cooperation from the very beginning over 15 years ago and moving forward will be no different.”
The news of the San Diego shutdown comes two weeks after Mikkeller announced that Kenneth Madsen had stepped down as CEO, having “mutually agreed to part ways” with Mikkeller. With the announcement, Mikkeller detailed a new business strategy for the company, “ambitious in terms of the quality of the beers and the experience in bars and restaurants,” and focused “less on expansion,” according to a press release.
“We will continue to work on maintaining our position in our focus markets,” Bjergsø said in the release. “Business is going well in the retail trade for instance where craft beer is fortunately on the rise. But we are taking things in stages, and right now it is the brand, product development and the beer that is our focus.”
Day-to-day management decisions for Mikkeller will now be overseen by an executive committee, consisting of Bjergsø; CFO and director Martin Connie Pinborg; and general counsel and chair of the board, Ditte Lassen-Kahlke.
In its 6-year life span, Mikkeller’s Miramar location faced numerous bumps in the road. Several incidents of toxic workplace culture have been alleged at the brewery, as early as 2017, Good Beer Hunting reported.
In July 2021, current and former employees shared stories of a hostile work environment, allegedly fostered by Bjergsø and the company, which led to the election of two work environment representatives (WE reps) in San Diego in January. Mikkeller also shared a company-wide action plan, including the implementation of a reconciliation program to “ensure all cases can be acknowledged, documented, and reconciled in a manner that meets the expectations of those harmed,” overseen by the business consulting firm Hand & Heart.
Bjergsø repeatedly denied claims against Mikkeller, labeling the portrayal of the company as “inaccurate and unfair” during interviews with Danish media outlets. Madsen later said the founder’s comments “did not convey the company’s or Mikkel’s stance in full on this serious topic,” Good Beer Hunting reported.
Editor’s Note: This story has been updated to reflect that the Miramar taproom will remain open through the end of September.